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What Is Japan’s Strategy Regarding Investment In India

Even as the Modi government was finetuning various aspects of GST over the past year to put the tax regime in place eyeing to attract bigger volume of FDI, investments from India’s key strategic and economic partner Japan have made a quantum leap during 2016-17. The Japanese investments in India during 2016-17 reached $ 4.7 billion registering a substantial jump from $ 2.6 billion during 2015-16.

Japan currently ranks as the third biggest investor in India and highest investor as the single country source. Cumulative Japanese FDI in India is $25.67bn between 2000 and 2017. Japanese FDI constituted 8 per cent of India’s overall FDI during this period.

Japanese FDI into India has mainly been in automobile, electrical equipment, telecommunications, chemical and pharmaceutical sectors. But officials pointed out that sectors are diversifying as India is undertaking economic reforms and GST will further boost Japanese investments here.

Economic relations between India and Japan have vast potential for growth, given the complementarities that exist between the two Asian economies.